Mortgage Refinance Calculator
Compare your current mortgage with a refinance: new payment, monthly savings, break-even month, and the true lifetime cost including the term restart.
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Quick Answer
Mortgage Refinance Calculator estimates new loan amount of $350,000 and current payment (principal + interest) of $2,701 for this scenario.
Key Takeaways
- Mortgage Refinance Calculator estimates new loan amount of $350,000 and current payment (principal + interest) of $2,701 for this scenario.
- Refinancing replaces the current loan at 8% with a new loan at 5.5%. The payment moves from $2,701 to $1,987 in principal and interest — saving $714 a month.
- On these numbers the payment drops by $714 a month and the closing costs break even after about 9 months. It is generally worth it if you expect to keep the property and the loan well past that point — and worth double-checking against the lifetime interest comparison, not just the monthly payment.
Calculation Output
New Loan Amount
$350,000
Current Payment (Principal + Interest)
$2,701
New Payment (Principal + Interest)
$1,987
Monthly Savings
$714
Break-Even on Closing Costs
9 months
Lifetime Savings vs. Keeping Current Loan
$88,993
Result Chart
New Loan Amount
$350,000
Current Payment (Principal + Interest)
$2,701
New Payment (Principal + Interest)
$1,987
Monthly Savings
$714
Break-Even on Closing Costs
9 months
Key Facts
| New Loan Amount | $350,000 |
|---|---|
| Current Payment (Principal + Interest) | $2,701 |
| New Payment (Principal + Interest) | $1,987 |
| Monthly Savings | $714 |
| Break-Even on Closing Costs | 9 months |
| Lifetime Savings vs. Keeping Current Loan | $88,993 |
How This Estimate Works
- Refinancing replaces the current loan at 8% with a new loan at 5.5%. The payment moves from $2,701 to $1,987 in principal and interest — saving $714 a month.
- At $714 saved per month, the $6,000 in closing costs is recouped after about 9 months. The refinance only comes out ahead if you keep the new loan (and the property) longer than that.
- Over the full life of both loans, keeping the current loan costs about $460,407 in remaining interest, versus $365,414 on the new loan — a lifetime saving of roughly $88,993 after closing costs, even with the new term.
- Taxes, insurance, and any HOA dues continue either way, so this comparison isolates the loan itself. Closing costs typically run 2–5% of the new loan amount; if a lender offers a 'no-cost' refinance, the cost is usually buried in a higher rate instead.
FAQ
Is refinancing from 8% to 5.5% worth it?
On these numbers the payment drops by $714 a month and the closing costs break even after about 9 months. It is generally worth it if you expect to keep the property and the loan well past that point — and worth double-checking against the lifetime interest comparison, not just the monthly payment.
How long until a refinance pays for itself?
Divide the closing costs by the monthly savings. Here that is about 9 months. Sell or refinance again before that month and the refinance lost money, however good the rate looked.
Does refinancing restart my loan term?
Usually yes — a new 30-year loan replaces whatever is left of the old one, which is a big reason a lower payment can still cost more total interest. Choosing a shorter new term (or paying the old payment amount on the new loan) keeps the rate benefit without stretching the debt back out.
How much do closing costs run on a refinance?
Commonly 2–5% of the loan amount, covering appraisal, title, origination, and recording fees. On the loan in this scenario that range would be roughly $7,000 to $17,500. Always compare lender offers on both rate and itemized costs, since a slightly higher rate with low costs often wins for shorter holds.
What changes with a cash-out refinance?
The new loan is bigger than the old balance, so the payment falls less (or rises) and you convert home equity into cash at mortgage rates. The break-even math is the same, but the extra borrowed amount also has to earn its keep — compare the rate on the cash-out portion against the debt or expense it replaces.